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The Effect of Protection of Temporary Workers on Employment Levels: Evidence from the 2007 Reform of South Korea

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  • Gyeongjoon Yoo
  • Changhui Kang

Abstract

The authors investigate the effects of recent South Korean labor reform, which was designed to protect temporary workers, on the level of temporary, permanent, and overall employment in that country. Because the effects of employment protection legislation (EPL) on employment levels remain theoretically ambiguous, they must be determined by empirical analysis. The impacts of the reform on both temporary and overall employment are negative at first and fade away in two years after the reform, hence taking a U-shape in the post-reform period. The impact of the reform on permanent employment is, however, positive two years after the reform. At least in the short run, an increase in protection for workers comes at a cost of reduced levels of employment.

Suggested Citation

  • Gyeongjoon Yoo & Changhui Kang, 2012. "The Effect of Protection of Temporary Workers on Employment Levels: Evidence from the 2007 Reform of South Korea," ILR Review, Cornell University, ILR School, vol. 65(3), pages 578-606, July.
    • Handle: RePEc:sae:ilrrev:v:65:y:2012:i:3:p:578-606
    DOI: 10.1177/001979391206500305
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    References listed on IDEAS

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    Cited by:

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    2. Tai Lee, 2022. "The Impact of Employment Protection on the Probability of Job Separation: Evidence from Job Duration Data in South Korea," Journal of Labor Research, Springer, vol. 43(3), pages 369-414, December.
    3. Diti Goswami & Sourabh Bikas Paul, 2020. "Labor Reforms in Rajasthan: A boon or a bane?," Papers 2012.01016, arXiv.org.
    4. Yeasung Jeong & Ayoung Lee & Joonmo Cho, 2018. "Educational mismatches and job resolution in South Korea, the USA, and Germany," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 32(2), pages 95-108, November.
    5. MATSUMOTO Kodai & OKUMURA Yota & MORIMOTO Atsushi & YUGAMI Kazufumi, 2023. "The Effects of Financial Incentives on Small and Medium-sized Enterprises' Demand for Workers with Disabilities: Evidence from changes in Japan's employment quota system," Discussion papers 23019, Research Institute of Economy, Trade and Industry (RIETI).
    6. Kim, Hyeon-Kyeong & Skott, Peter, 2014. "Labor market reform and wage inequality in Korea," UMASS Amherst Economics Working Papers 2014-13, University of Massachusetts Amherst, Department of Economics.

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